Walsh took millions, suits say

Charleston developer Steve Walsh pocketed more than $21 million of his business partners' money before he committed suicide in late June at his Florida home, recent lawsuits allege.

Ricardo Ramirez Buxeda / Orlando Sentinel

Three lawsuits accuse the late Steve Walsh of bilking his business partners out of more than $21 million.

Walsh, managing partner of Broad Street Partners, is accused of siphoning the funds from planned projects to finance a lavish lifestyle that included pricey homes in Charleston, Winter Park, Fla., and Highlands, N.C., according to lawsuits filed in Orange County, Fla.

In one instance, Walsh allegedly drained $2.5 million from an apartment project known as Marymeade in the Charleston area, and used the money for a donation, a lawsuit states. The court papers do not identify the recipient. In 2005, Walsh and his wife, Paula, pledged that same amount for a new medical school at the University of Central Florida.

J. Steven Schrimsher, a former Walsh business partner in Florida, hired a retired IRS criminal investigator to review the finances of various projects after Walsh, 61, killed himself with a shotgun June 25.

The review reportedly uncovered "significant irregularities" and has led to three lawsuits filed against Walsh's companies, his widow and five life insurance companies that held policies on the developer.

Schrimsher gave the findings to federal authorities in Florida. The FBI and the U.S. Attorney's Office are reviewing the material to determine if any criminal violations occurred, said Special Agent Dave Couvertier, public information officer for the FBI's Tampa field office.

The allegations cast a dim light on a developer who was known as a tenacious businessman and a generous philanthropist. He had weathered ups and downs, emerging from a 1990 bankruptcy filing to become a major force in the real estate development industry once again.

Formed in Charleston in 1994, Broad Street Partners has offices in the Lowcountry, Florida and North Carolina.

Walsh and his company had an estimated $1 billion in projects in the works in recent years, much of it in Florida.

Walsh primarily lived in Florida, but maintained a three-bedroom home along Charleston's fashionable South Battery valued at more than $800,000, county records show.

The lawsuits allege that Walsh kept up this lifestyle by stealing money from bank accounts controlled by him, his firm and related businesses. The financial review found that Walsh improperly transferred or loaned millions of dollars from various project accounts to his other business entities, then did not repay the money, the lawsuits state.

One lawsuit alleges that Walsh made off with all but about $300,000 of the $9.8 million raised to finance a 292-unit apartment community with additional retail and office space in Tallahassee, Fla.

In addition to financing his homes and the large donation, Walsh allegedly used the project money to pay Broad Street's bills and buy life insurance policies that would benefit his wife, the lawsuits state. He also is accused of improperly paying his wife at least $1 million over a 10-year period.

Carla DeLoach Bryant, an attorney for Schrimsher's companies, said her clients had no suspicions about Walsh before his death.

Schrimsher, whose companies are involved in all three lawsuits, told the Orlando Sentinel that he is now in a desperate battle to protect his companies, his family's reputation and his investors from the damage wrought by a man he once considered a friend.

"Steve Walsh is a criminal," Schrimsher told the newspaper. "He betrayed everybody."

Paula Walsh's lawyer, Bill Wilson, declined comment on the allegations Thursday.

Representatives of Broad Street Partners could not be reached for comment. Damien Madsen, a senior partner with the company, recently told the Sentinel that he and other employees were shocked by the allegations against Walsh.

Reach Glenn Smith at 937-5556 or gsmith@postandcourier.com.